I always celebrate the Hewitt Annual Health Care Cost Survey by going down to Circuit City to buy a new pocket protector. Seems like no one is around to help me these days, but if someone is available, they haven't worked there long. Go figure...
I jest, but the Hewitt Annual Health Care Cost Survey (I'm calling it the HAHCCS for short.. kinda like
TPS reports) is always chock full of benchmarks that matter. How much healthcare costs, what companies are paying on average on behalf of their employees, how much the same level of coverage is expected to increase in the next year, etc. Good stuff, good times.
We'll get the party started with the data below from Hewitt, who's putting the annual trend (that's increases for you who don't talk to brokers) at 6% for 2008, and projected much of the same for 2009 at 6.4%. On the employee side, employee contributions (what employees pay out of their paycheck) increased from 2007 to 2008 by just under 10%, showing on average some cost shifting to employees.
It's a sick world when a 6% cost increase feels good, but all you have to do is look at the chart below, and see the period from 2001 to 2004 to understand why most of us will take 6%.
Couple of notes - all data below is from Hewitt, click here for the full summary. National cost per employee indicates what the total cost is for the company based on the average number of covered participants for each employee (including the employee themselves), which I would estimate nationally in the 2.1 to 2.2 range.
Total Plan Costs
Year
National – Percentage Increase
National – Cost Per Employee
2009*
6.4 percent
$8,863*
2008
6.0 percent
$8,331
2007
5.3 percent
$7,857
2006
7.9 percent
$7,464
2005
9.2 percent
$6,915
2004
12.3 percent
$6,334
2003
14.7 percent
$5,639
2002
15.2 percent
$4,914
2001
10.2 percent
$4,268
*Projected
*Costs are plan costs (premium or budget rate) on a per employee basis. It includes employee contribution, but not their co-pays.
Average Employee Contribution for Coverage
According to Hewitt data, the average employee contribution in 2008 was $1,806, representing 22 percent of the overall health care premium and up from $1,645 in 2007. Employees’ contributions have more than doubled since 2002.
Year
National Average Employee Cost
2009*
$1,946*
2008
$1,806
2007
$1,645
2006
$1,433
2005
$1,268
2004
$1,127
2003
$943
2002
$770
2001
$641
*This represents the employee contribution to the overall health plan premium and does not represent out-of-pocket costs (i.e. co-payments, co-insurance).
So, compare and contrast, my friends, and sleep tight knowing you are doing what you can to keep coverage affordable for your employees. Even if it means taking tough medicine like mandatory mail order, etc. Sometimes you have to roll like that, to keep the benefit levels for all, where they are...
Health care in America is in trouble. At $700 billion the current financial bailout is roughly equivalent to 5% of the US GDP. That’s chump change compared to the more than 16% of GDP (yes, that’s over $2.2 trillion) the US spent on health care in 2007. Pop quiz: What’s 34% of 2.2 trillion? Trick answer: The portion of the health care bill that is paid by business. The costs of poor health are outpacing wages, inflation and GDP. By a lot. According to the Kaiser Family Foundation Health care spending has risen about 2.4 percentage points faster than GDP since 1970.
75% of the cost of health care pays for chronic, preventable illness. We need to start offering the kind of wellness and preventative care programs at work that will realistically compete with easy and fast choices such as donuts, cigs and DVDs. It only makes sense to offer wellness in the place where most of America spends the majority of its waking hours - at work. Corporate wellness is good for employers and good for employees. For more resources, stats, and HR perspectives on wellness, read:
The Bailout Is For Wimps:
http://corporatewellnessprogram.recesswellness.com/2008/10/700-billion-pffffttt-bailout-is-for.html
Get Well Soon, CEO:
http://corporatewellnessprogram.recesswellness.com/2008/10/get-well-soon-ceo.html
Worker Productivity and Miracle-Gro For The Brain:
http://corporatewellnessprogram.recesswellness.com/2008/10/worker-productivity-and-miracle-gro-for.html
Posted by: Tanya | October 31, 2008 at 11:52 AM